Teamsters, Car Haulers Avoid Strike, Agree on Tentative 4-Year Contract

DETROIT — The Teamsters union and companies that haul new vehicles to dealer showrooms agreed Wednesday to a tentative four-year contract that averts a strike that threatened to disrupt surging auto sales.

James P. Hoffa, the newly elected president of the International Brotherhood of Teamsters, said the contract provides for improved wages and pension benefits without making major concessions to the companies.

“This is the first major step in the Teamsters union coming back,” Hoffa said at a news conference in Arlington, Va., where the negotiations were conducted.

The union, which represents about 12,800 car-haul drivers, yard workers, mechanics and office workers, expects a majority of members to ratify the contract within a few weeks. However, there is likely to be resistance from dissident groups long opposed to Hoffa and his supporters.

The negotiations are the first conducted by Hoffa, son of legendary Teamsters leader Jimmy Hoffa, and are considered an important initial gauge of his bargaining, leadership and consensus-building.

Although Hoffa claimed victory, company negotiators said the new contract reflects compromises by both sides that give financial gains to workers while providing changes in work rules that will allow the firms to remain competitive.

“The nature of compromise is that neither side gets everything they want,” said Ian Hunter, chief negotiator for the National Automobile Transporters Labor Division, which represents 17 car-haul companies, including industry leader Allied Holdings Inc. of Decatur, Ga., that deliver 90% of new vehicles to dealerships.

The talks came as auto sales are running at record levels and car haulers are raking in strong profits. The Teamsters demanded improved wages and benefits, while the companies sought concessions needed to hold off competition from lower-cost railroads and nonunion carriers.

The agreement gives truckers a one-time $1,500 bonus in the first year, followed by base-wage increases of 50 cents an hour in each of the next three years. The pay increases amount to less than 3% a year.

In addition, the union said, its truckers will be able to retire, after 25 years of service, at age 55, with pensions of $2,500 a month, up from $1,500 a month, and with full medical coverage. In addition, workers of any age with 25 years of experience can retire with pensions of $2,000 a month.

“It’s a modest victory for the Teamsters,” said Michael Belzer, a labor professor at the University of Michigan.

But he warned that the “devil is in the details.” For instance, the union agreed to allow greater flexibility in scheduling for mechanics that could require them to work weekends. It is unclear whether the Teamsters agreed to lower pay rates for new business in the used-car sector, an area now largely controlled by lower-paying nonunion carriers.

These issues are likely to prompt resistance from Hoffa’s vocal opponents. Ken Paff, national coordinator for the dissident Teamsters for a Democratic Union, called the contract a union giveaway.

“What surprises us is that Hoffa would agree to a concessionary contract rather than call a strike,” he said.

Chip Roth, a Teamsters spokesman, said that such opposition is politically motivated.

“Any objective review of the contract will show it’s a significant victory for the Teamsters,” he said.

He noted that the car-haul companies backed away from the imposition of a two-tier wage system that would have paid entry-level workers 30% less than veterans. The firms also agreed not to use lower-wage Mexican drivers and trucks to deliver new vehicles in the United States, a practice allowed by the North American Free Trade Agreement after 2000.

Settling the contract without the economic disruption of a strike is likely to raise Hoffa’s stature. Some labor analysts had expected a strike, given his militant rhetoric and a campaign plank that called for restoring Teamster power.

“I’m kind of surprised he didn’t call a strike, if only for the theater of it all,” Belzer said.

The Teamsters had threatened to strike this week unless a new agreement could be reached. The developments were closely watched by auto makers.

New-vehicle sales are running at a record pace for the first five months of the year. Any disruption in deliveries could have put popular models, such as sport-utility vehicles, in short supply.

The car-haul agreement is the only major trucking contract Hoffa will negotiate during his three-year term, which began May 1. If the deal is ratified, he will next turn his attention to long-simmering labor disputes at Northwest Airlines Corp. and Anheuser-Busch Cos.